Six ways to address the labor shortfall in hospitality

By Philip Saneski

It is no secret that the hospitality industry has historically been one of high employee turnover and labor shortages. The COVID-19 pandemic accelerated this reality and since then, restaurants have had to rely on their staff to accept more responsibility for the same pay with inconsistent hours – be it too little weekly or too many daily.

Globally, this caused a labor shortfall in hospitality. During COVID-19, workers in hospitality left and had no intention of coming back to restaurants. Many employers still struggle to attract and retain dependable employees to sustain their businesses. This is especially true in expensive cities like London and San Francisco where urban residents (and thus hospitality revenue streams) were moving away.

Solutions to those problems were addressed at the Food Integrity Global panel titled “Plugging the Gaps: How do we address the labour shortfall in hospitality.” An expert panel joined New Food’s Editor Joshua Minchin on October 17, 2023 at the Millennium Gloucester Hotel in London.

Blake Henderson is the Managing Director (MD) of Market Place London, a multi-unit food hall that offers a variety of mixed usage spaces for 56 independent international street food businesses and provides opportunities for the local community by removing barriers for start-up companies, enabling independent businesses to grow. Laura Dunn Nelson is the Vice President (VP) of Business Development of Intertek Alchemy, a people-focused organization that develops solutions and services for thousands of clients that ensure their millions of frontline workers feel valued with plentiful growth opportunities. Simone Santeramo is the Operations Manager of CH&CO, a group of chefs, nutritionists and people pleasers with a shared passion for food that fuels emotional positivity as well as physical wellbeing. Philip Saneski spoke as the Culinary Director (CD) of Farming Hope, a San Francisco-based paid culinary job training non-profit that empowers Apprentices experiencing major social and economic barriers to employment to cook food for themselves, their communities, and ultimately their future employers.

There were many key takeaways, things to look forward to, and long-term strategies around addressing the labour shortfall in hospitality. All of which were discussed in detail on stage at the conference.

Labour costs

Working 18 hours days is unsustainable and is not tolerated by the hospitality workforce anymore. While organisations may need to hire additional labor to work eight hours shifts, over time employee efficiency will improve quality whilst reducing labor costs. One suggestion for how to track this progress was to set one quarterly KPI or OKR and show those employees the company financial improvements so all stakeholders can track operational efficiency together. There would be some great cross functional learnings with this accountability.

Utilising technology

Restaurants can learn from food manufacturing companies about how to use technology to build better, more efficient systems. Some examples given were having better knowledge transfer, standard operating procedures, and in food safety compliance.

Prioritising “proper” training

Investing in properly training people can reduce employee costs and promote company growth by enabling managers to consistently be managers. Having to re-train employees can shift executive-level resources away from big pictures tasks and towards daily troubleshooting.

Highlighted by panelists at Food Integrity Global 2023, investing in properly training people can reduce employee costs and promote company growth.

This type of turnover could lead to a “trickle-up” effect where managers do not feel supported and can cause leadership turnover. For larger organizations, one way of measuring this could be tapping into CSR and Sustainability department assets to enable better employee engagement and labor retention.

Building a strong company culture

Laura Dunn Nelson referenced data that indicated about half of all frontline employees leave an organisation because they felt disconnected, and their career growth trajectories are unclear. She emphasized the need for building a strong company culture where all employees feel valued and heard amongst their peers.

Pursuing passions

In addition to the work ethic a restaurant introduces, there are many growth trajectories for those who start in hospitality and want to pursue their passions–be it advanced culinary, wine education, marketing, supply chain or operations, among others managerial career ambitions.

Hendersen told one example of a bartender that had a hobby for photography, so a restaurant group created a role for them to be part of their digital marketing team. Another example was given about a Farming Hope Apprentice graduate who had created a role for himself as a Chef Programme Mentor because of his passion to help disadvantaged populations secure jobs in hospitality.

Impactful hiring

Hiring with impact can create an amazing, “can-do” company culture that holds all employees to a unique accountability. Examples at Farming Hope were given about how hiring those formerly incarcerated, housing insecure, recovering from addiction, or seeking political asylum as a new immigrant helped set a humble standard amongst entry-level and management staff.

Knowing what someone is going through can inspire all employees to be grateful and appreciative of their stable income, coworkers, and loved ones. Similarly, data was presented about how Farming Hope Apprentice graduates remained loyal employees to the restaurant employers who took a chance on hiring them, thus improving labor retention. Stories like these prove how hospitality employers can explore all options when it comes to attracting consistent talent and, within larger hospitality cultures, showcase what corporate DEI initiatives are meant to do.

A third of hospitality businesses could go bust by 2023

Further, Simone Santeramo made great points about how the CH&CO Group had tapped into charities and philanthropic organisations to support DEI hiring initiatives. He also gave long-term strategic recommendations about how corporate organisations can co-apply for grants alongside academic institutions to better understand more data points that reflect more efficient operational systems. For young talent hungry to make a change for the better, social impact initiatives like these can attract top university students to apply for opportunities throughout the hospitality industry.

In conclusion, managers who build relationships with their employees at every level enable a better work culture, mitigate employee turnover, continuously improve labor efficiency, and can inspire diverse career trajectories in hospitality. Sometimes we forget working in hospitality is being in the business of making people happy (and that happy people make happy food).

About the author

Philip Saneski has an extensive fine-dining culinary background, experience starting an upcycled food company, has worked for CPG consultancies and built impact-driven social enterprise at Farming Hope. He lives in the San Francisco bay area and currently consults for a wide range of companies working towards a better future of food.